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Teardown: iPad mini costs Rs.10,200 to build

Posted: 07 Nov 2012     Print Version  Bookmark and Share

Keywords:teardown  iPad mini  Wi-Fi  New iPad  media tablet 

According to a teardown analysis of Apple's iPad mini, the base 16GB Wi-Fi model, which retails for Rs.17,880.43 ($329), costs only Rs.10,217.39 ($188) to build. When the Rs.543.48 ($10 )manufacturing expense is added in, the total cost to manufacture the iPad mini rises to Rs.10,760.87 ($198).

"Based on the ratio of cost to retail price, IHS has concluded that the iPad mini is slightly more profitable on a percentage basis than the comparably equipped version of the New iPad when it was released in March 2012," IHS said in its preliminary teardown assessment.

IHS

iPad Mini

"With the iPad mini, Apple is sticking to the premium-brand strategy it has always used for its media tablet and smartphone products," said Andrew Rassweiler, senior principal analyst, teardown services, IHS.

"Apple's strategy entails offering differentiated hardware that justifies higher price tags than comparable products. This differs markedly from Amazon's 7-inch Kindle Fire HD and Google's Nexus 7 tablets, both of which are essentially low-margin or no-margin giveaways at a Rs.10,815.22 ($199) retail price. Apple makes healthy margins on its hardware, while Amazon and Google employ different strategies with their 7-inch tablets."

"Amazon and Google want to put tablets in consumers' hands—even if it means doing so at a minimal hardware profit—with the intent of making their money on the content users buy, and/or the advertising and paid content they will be exposed to by buying the devices," Rassweiler observed.

IHS

With the iPad mini, Apple continues to garner even greater profits from sales of the higher-end tablet models that have greater amounts of flash memory.

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